Nepal: Political Stalemate Threatens Foreign Aid

Dec 22, 2010 • 8:44 pm

More than four years after a peace agreement, most Nepalis are struggling to get by. (Brendan Brady/IRIN)

KATHMANDU, 22 December 2010 (IRIN) – After 16 attempts, Nepal’s feuding parliament still has not been able to elect a new prime minister and only a recent last-minute emergency decree by the president allowed the government to access new funds.

It has been more than four years since a Maoist insurgency was brought to an end by a peace treaty contingent on a new constitution and army – neither of which has been achieved.

Replacing Prime Minister Madhav Kumar Nepal, who resigned in June following pressure from his opponents but has remained in a caretaker role, has proven impossible.

To elect a successor requires the support of more than half the 601-member parliament but the party with the largest electoral backing, the Unified Communist Party of Nepal (or “Maoists”) has been unable to secure a coalition partner to win a majority on any issue.

Since June, the Himalayan nation has not had a fully functioning government.

For several months it survived on emergency funds, limiting the scope of the government’s services and development work.

Only an 11th hour emergency decree in November by the president allowed the country to access new funds and resume payments to civil servants.

Donor impatience

But as the deadlock has taken its toll on the country, it has also worn away the patience of foreign donors, who continue to warn that their ability to deliver aid could soon be curtailed if the leadership vacuum continues.

The first half of this fiscal year, from July to the end of November, saw almost US$500 million in new aid commitments, compared with $853 million over the same period last year, according to a UN official.

This in a country where half the government’s national budget this year for development work comes from foreign donors, including loans and grants.

“The slow pace in implementing the peace process, combined with the continued caretaker status of the government, lack of development leadership, significantly reduces most donors’ ability to secure future resources for Nepal,” according to a statement issued in November by USAID on behalf of several western embassies, as well as the World Bank and Asian Development Bank.

That letter came just three days after a statement, issued on the fourth anniversary of the treaty ending the country’s civil war, by 13 countries and the European Union expressing concern over the lack of progress.

The leadership positions of the main government offices in charge of financial accountability – the Office of the Auditor General, Financial Comptroller General Office and Commission for the Investigation of Abuse of Authority – are still not filled.

Nepal’s already poor score in Transparency International’s global index dropped another three slots, to 146th, from last year. Its decline in the ranking, which measures the perceived level of public-sector corruption, was due to the “weak anti-corruption mechanism” and “unstable government”, the group said.

If no political progress is made before the UN Mission in Nepal (UNMIN) departs, “it will underscore the grounds for concern that the donors expressed in their statement”, Neil Briscoe, deputy head of the British government’s aid arm, DFID, in Kathmandu, told IRIN.

The UN mission monitoring the ceasefire is scheduled to end on 15 January and UN officials have recently said it would not be extended.

The deadline for a new constitution was pushed back a whole year after the initial May deadline expired.

But the public lacks confidence that even this much-belated deadline will be met, according to a statement by the Kathmandu office of the US-based Carter Center.

“Citizens are increasingly disillusioned by the constitutional process and pessimistic that the constitution will be written on time,” the organization said in a report based on interviews with more than 3,000 Nepalis.

“Within the next four weeks, the parties should come together to ensure there is a clear and broadly acceptable plan for transferring UNMIN’s main roles and responsibilities on monitoring and dispute resolution,” Sarah Levit-Shore, with the Carter Center in Kathmandu, said.